Bluetongue virus (BTV) is an arbovirus and the cause of “bluetongue”, a major infectious disease of ruminants. Whilst the BTV structure and replication strategies are well elucidated, less is known on the genetic variability of BTV and the molecular determinants affecting virus-host interactions. In order to investigate the determinants of BTV virulence, in this study, we compared the phenotype and genotype of a highly virulent strain of BTV-8 isolated in the Netherlands a passaged minimally in tissue culture (BTV8L), with a strain passaged extensively in tissue culture (BTV8H). BTV8L was shown to be highly pathogenic in sheep and in a mouse model of bluetongue, while BTV8H was attenuated in both hosts. Full genome sequencing revealed differences in 16 amino acid residues between these two strains. Using reverse genetics, we rescued both viruses, in order two further dissect their biological features. Rescued viruses retained the phenotype of the parental viruses in vivo and in vitro. Reassortants between BTV8L and BTV8H showed that mutations in several segments contributed to attenuation of the high passage virus. The major determinants of BTV8 virulence in IFNAR-/- mice were shown to be located in segments 1, 2, 6 and 10. In vitro studies of selected reassortants showed that through extensive passage in tissue culture BTV8H acquired increased affinity for glycosaminoglycans. This property was conferred by mutations in segment 2 and resulted in increased yields of the virus in vitro and attenuation in vivo. Additionally, BTV8H was unable to replicate in IFN competent primary sheep endothelial cells. Our data showed that multiple segments were involved in decreased efficiency of BTV8H replication in cells in an IFN-induced antiviral state. Moreover, we examined changes in viral population diversity that occured after BTV-8 isolation in insect cells (Culicoides, KC) and after passage in mammalian cells and linked decreased diversity with BTV virulence in vivo. We found, that in general, the number of genetic variants was higher in BTV-8 before cell passaging, or after one passage in KC cells, compared to the number observed after even a single passage in BHK-21 cells. The highest total number of variants was found in virus passaged in KC cells, which suggests that insect vector might serve as an amplifier of quasispecies diversity of BTV. Together, these findings suggest that the virulence of BTV is a multifactorial phenomenon involving many aspects of virus-host interactions and it is not only affected by changes in the viral proteins selected at the consensus level, but also by the genetic variability of the population as a whole.